I am one who is admittedly struggling with finding the appropriate balance for my own kids (7, 5, 3).
When kids are young like mine are, social media is hardly on their radar. Nearly all the kids in my 7 year old's second grade class don't have social media access, as far as I am aware, and I think there is enough information out there that most parents avoid it.
Advertising and video content are much more difficult to weed out in an open source environment. I say 'video content' in general, because try as we may (and boy have we tried), there are myriad sources of low, low effort content (which are often coupled with advertising) and no matter how hard you push back, the algorithms will almost always find a way to bring the garbage back to the top.
My kids, for better or worse (please, reserve your judgement) have access to YT Kids, controlled access to regular YT, access to certain streaming services, and access to a Nintendo Switch. They engage with these media through: our phones, our TV (with a Roku), the Switch, and a school-supplied iPad.
I bring this up because, as one who has desperately tried to meter the content for 4 or 5 years now, the only way to avoid ads and low effort videos are to only allow access to closed source devices with significant parental monitoring. We forbade YT on the TV, only to find that apps like 'Kidoodle' allow access to the same low-effort content. We tried to put blocks on our router for certain sites only to fine that the school iPad VPN can sail right past those blocks. If the device has access to the internet and weak parental controls, there are ways and means for kids to access things you don't want them to have access to.
The one thing that people don' frequently bring up - other kids and their parents. You may have a great system at home but outside of your home, there's not a lot you can do to ensure that other parents are taking the same approach. At 7, some kids have phones, and kids will all crowd around the kid with the device and watch whatever they are watching. Some kids have already figourd out how to get around school VPN blocks, and are sharing that information with kids in class. If your child goes over to another house, how comfortable are you in demanding that no screen time be permitted while on the playdate, if you're not willing to host them all yourself.
In 2023, it's very challenging to have control over 'technology' (the broad term we use in our house to categorize anything with a screen). No matter how many studies demonstrating negative effects of screens on children are published, our world is slowly being plastered with screens and technology. Kids, like a moth to a flame, immediately watch with rapt attention. From infants through teens (and even as adults, you have to admit), screens are eye candy.
My sons remember every advertisement we pass in the car displayed on digital billboards.
Like you say, this is the world we live in. Even if your kids aren't going to be software engineers or digital artists, everything now demands the use of technology. Most of the conversation among my oldest's friends centers around Fortnite, Minecraft, VR, or YouTube.
Those kids who don't have access at all to those things are ostracized. We teeter on that edge constantly - of those, only Minecraft (and only local play) is allowed in our house without supervision.
We can't pretend like we're doing our kids a favor by cutting them off and saying "you'll thank us in 18 years". Social isolation can really mess up a kid's development. I know this from direct, firsthand experience. But conversely, there is such a thing as too much.
In playing Switch games, my kids have developed some great problem solving skills. As bad as YouTube can be, there's a lot to be learned from it and kids will vacuum it all up (good and bad). We have a lot of fun with 'family movie nights' where we use a system my wife came up to randomly pick a movie that we have to watch.
They still read books, color, pay with Lego, play outside, rough-house, etc.
Every day I question whether the balance we have is right. That's the hardest part, because if you're sick or busy or incapacitated then screens are a great way for you to take care of what you need to without the kids interfering. If you're trying desperately to put the 1 year old down for a nap and the 4 year old keeps waking them up, handing them the TV remote enables you to get the baby to sleep. On long car rides, a pair of headphones and a few movies downloaded to the phone are great for keeping kids occupied.
Some families we know are more strict than we are with technology, and those kids wind up at our house half the time to watch something or play a few Switch games. Some families we know are much more lax, and our kids desperately want to go to those houses where there is access to more than they have here. We know no families who have a blanket technology ban. There is one family I suspect has a near blanket ban, but they homeschool and don't let their kids go to other houses unaccompanied.
I don't know how we are going to adapt and evolve with technology, and the access we will grant as the kids get older. We do have time and content limits, and barring extraordinary exceptions, the kids have to use technology where we can supervise them. Without 2-3x the effort we apply to this facet of their lives, I don't see us clamping down any more than we have, but I also don't see us loosening any more either.
ETA: I left out the most important thing - we try our darndest to be understanding with them. There is content that we have no clue exists and when they discover it, we try and not have a knee-jerk reaction. To us, it's absolutely critical that we have conversations about why certain forms of content are unacceptable. We help them to be able to understand how to identify technology and content that's appropriate vs. not appropriate. We explain our reasoning about why we don't have more technology in our house, and help them to recognize why other families might have less.
To me, gating all content for as long as possible is like trying to hold back the tide. At some point, you just can't anymore unless your kids are under your supervision 24/7. Part of being a parent is realizing that even when they're young, your kids are their own person and not your slave or puppet. By giving them some agency, they're far more likely to respect established boundaries.